A.M. Best Revises Outlooks to Negative for Constitution Insurance Company

Business Wire

OLDWICK, N.J.--(BUSINESS WIRE)-- A.M. Best has revised the outlooks to negative from stable and affirmed the Financial Strength Rating of A- (Excellent) and Long-Term Issuer Credit Rating of “a-” of Constitution Insurance Company (Constitution) (headquartered in Omaha, NE).

The ratings reflect Constitution’s balance sheet strength, which A.M. Best categorizes as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.

The rating action is based on a material reduction in Constitution’s premiums over the past year, which has led to a diminishing business profile. In addition, while results have historically benefited from management’s niche specialty orientation and prudent underwriting discipline, the trend of declining premiums has highlighted the significant product, geographic and distribution concentrations that will continue to challenge the company in the future. Material deviation in management’s stated business plans, with any associated adverse impact to premium production, business profile, profitability or risk-adjusted capitalization, could lead to further negative rating pressure in the near term.

This press release relates to Credit Ratings that have been published on A.M. Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see A.M. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and A.M. Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.

A.M. Best is the world’s oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

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A.M. Best

Daniel Heitlinger

Financial Analyst

908-439-2200, ext. 5019

daniel.heitlinger@ambest.com

or

Christopher Sharkey

Manager, Public Relations

908-439-2200, ext. 5159

christopher.sharkey@ambest.com

or

Raymond Thomson, CPCU, ARe, ARM

Associate Director

908-439-2200, ext. 5621

raymond.thomson@ambest.com

or

Jim Peavy,

Director, Public Relations

908-439-2200, ext. 5644

james.peavy@ambest.com